NEW YORK Growth
in Chinas power grid spending is expected to slow after
investments in the sector stalled in May, Barclays Capital Plc
analysts said, noting that copper could suffer.
"As the power sector
accounts for around 40 percent of Chinese copper consumption,
the sudden loss of momentum raises concerns that copper demand
could likely run out of steam," the report said.
Spending was flat in
May compared with a year earlier following a 30-percent
increase in spending during the first four months of the
In the United States,
demand has slowed sooner than usual
(amm.com, June 12) despite lower copper
prices, traders and buyers told AMM. In China,
however, demand rose 24 percent in April compared with the
previous month, in part because of the high grid investment in
the first four months of the year, according to the Barclays
Barclays analysts were
unavailable for comment, but they said in the report that the
halt in spending could be exaggerated by seasonal issues, such
as slower construction because of weather, and the state power
Analysts now believe
that the strong investments in the beginning of the year, which
were due to leftover projects from 2012, will level out.
Last year, the
National Development Reform Commission approved only three of
10 ultra-high-voltage projects submitted by State Grid Corp. of
China, and analysts expect the commission to remain cautious on
Grid investment growth
also is expected to slow to smaller full-year targets. Total
investment spending is still targeted to grow 1.1 percent
compared with 2012.